Deputy Collector & ANR Vs. Kurra Sambasiva Rao & Ors  INSC 475
(29 April 1997)
RAMASWAMY, S. SAGHIRAHMAD, G.B. PATTANAIK
CIVIL APPEAL NOS. 3795-3814OF 1997 [Arising out os SLP (C) No.15841/95 and SLP
(C) No. 11355- 373/96 (CC-702) O R D E R Delay condoned.
appeals relates to the acquisition of the lands of 97 acres 42 cents of land
situated in the outskirts of the Tenali town of Guntur District in the State of Andhra Pradesh. The lands were acquired for the development of the colony
for theweakersections-middleincome group persons etc. The notification underSection
4(1) of theland Acquisition Act was publishedon December 9,1980. TheLand Acquisition officer awarded compensation Rs.
22,940/- per acre for levelled up land and Rs. 21,700/-per acre for unlevelled
land. On reference, the Subordinate judge, Tenali by hisaward and decree, dated
February 26,1991 award uniformcompensation atthe
rate of Rs.1,00,000/- per acre.
by the appellantsas well as the claimants respondents, the High court by
judgment and decree dated March 23,1994,furtherenhanced
the compensation to Rs.
sq. yard; thus it allowed the appeals of the respondent-claimants and dismissed
those of the appellants.
these appeals by special leaveand cross appeals by the respondent-claimants for
further enhancement of compensation. They are disposedof by common order.
High Court, after rejecting the entire evidence adducedby theclaimants relied
only on a saledeed, Ex. A- 12 dated May 19,1978 relatingto a piece ofland of an
extent of 250 sq. yardwith a thatchedhouse. It worked out compensation at the
rate of Rs. 48/- per sq. yard; onthat basis, it gavemarginof deduction of 50%
of the awarded compensation, namely, at the rate of Rs. 23.50per sq.yrd.
question for consideration is; whether the principle laid down by the HighCourt
is correct in law? Theland Acquisition officer in his award had referred to the
topographical features of the land thus.
landsunder acquisition form a compact block surrounded on the north by Tenali-Guntur
Railway Track, onthe east by lands owned bySouth Central Railways. On the south
by landswhich abut the Tenali-Guntur highway roadand also built up area in T.S.
No.22 (in the case for T.S. No.27) and on the west by Agril lands. T.S. No. 26
and 29 which fall in the compact block have already been acquired.
beneficiaries have raised a few huts here and there. R.S. No. A-250 also formspart
ofthe block and it is under acquisition for house sites for weakersections separatelyunder
the lands in the block under acquisitionbarringa few I velled up fields are
similar because ofthe following reasons (1) All the landsare more or less
equally inaccessible from the township.
All the lands (excepting few levelled up fields) are read as wet paddy fields
similar in soil fortility and productivity.
Excepting the few levelled on plots to level each of the under acquisition,
similar levelling up cost is requiredto beincurred which works out to
approximately Rs. 60,000/-per acre in the most conservative estimate. All the
lands under acquisition have equal potentiality or otherwiseof being used as
between the blockof lands under acquisition,there is channel running in
North-south direction and it touches theGuntur Narakodur Tenali Road. The channel is now not inuse.
metal roadhas been formed along with the channel bythe side ofTS. 15 to make
across from truck road to the built up area in T.S. Nos. 23 and 22.
No. 142 and T.S.Nos. 12, 13, 14 and 16 which are not under acquisition fieldin
between the lands under acquisitionand the Guntur-Narakodur Tenali Road.
these fields are developed into Township, there is noprospect of the lands
under acquisition features of a township.
few fields stand classifiedin accounts as semidry and all others stand
classified as wet. Notwithstanding the variation inclassification, all the
lands under acquisitionexecuting a few levelled up plots are wet paddy fields onground.
The few lands which were not grown with paddy were cultivated with dry crops
like banana, sugar and chillies. To make the lands under acquisition suitable
for house sites, the levels have to be raised by about 2 to3 feetto make themfit
for building purposes. There can be no two opinions about the difficulty that
is presently being experienced by personswhopurchase Agricultural lands in Tenali Town ingetting earth rooted to those lands forlevelling themup.
From the experience of the Municipality which understood levellingwork for provisionof
houses to weaker sections of the society, it can be said withcertainty thatthe
cost involved in levelling up these lands to makethem fit for residential
purposes would be not less than Rs. 60,000/- peracre.' Onthe basis of the above
factual material collected, the land Acquisition officer passed his award.The
question arises:whether the acquired lands possessedof potential value for
being used as building sites? The High Court has found, as pointed out by Shri Sudhir
Chandra, learned senior counselfor the claimants, that the lands arepossessed
of potential value for being used for building purpose. It is well settled
legal position that the claimantsstand in the position of plaintiffs. Burden of
proof is always on the claimants to prove byadduction of cogent and acceptable
evidence that the lands are capableof fetching higher compensation than what is
determined bythe land Acquisition officer, whichis only an offer. If the award
is accepted withoutprotest, it binds theparties. It is the bounden duty of the
court to evaluatethe evidence onthe basis of the human conduct, even if no rebuttalevidence
is produced by theLand Acquisition Officer, to assess themarket value applying
the relevant tests laid down by this Court inbead role of decisions. InPeriyarand
State of Kerala [(1991) 4 SCC 195], this Court considered theentire case law as
onthat date, on the principle of determination of market value andthe relevant
test laid in that behalf. The burdenof proof that the amount awardedby the land
AcquisitionOfficer/Collector is not adequate is always on the claimant. Theburden
is to adduce relevant and material evidence to establish that the acquired landsare
capable offetching highermarket value than the amount awarded by the land
Acquisition officer/Collector or that the land Acquisition Officer/Collector proceeded
ona wrongpremiseor applied a wrong principle of law. The object of the enquiry
in a reference under Section 18 of the Act is to bring on record the price
which the land under acquisition was capable of fetching in the open market as
on the date of the notification. The relative situation of the acquiredland
which is the subject of the sale transaction, the nature of the land, its
suitability, nature ofthe useto which the lands are put to on the dateof thenotification,
income derivedor derivable from or any other special distinctive feature whichthe
land is possessed of and thesale transactions in respect of lands covered by thesame
notification, are all relevant factors to be takeninto consideration in determiningthe
market value. It is, therefore, theparamount dutyof thecourts of facts to subjectthe
evidence to very close scrutiny, objectively assess the evidence tenderedby the
parties on proper consideration thereof in correct perspective to arrive at
adequate and reasonable market value.The attending facts and circumstances in
each case wouldfurnishguidance to arrive at the market value of the acquired
lands. it is equallyrelevant to consider the neighbourhoodlands as are
possessed ofsimilar potentiality or anyadvantageous features or any special
circumstances available ineach case. The Court is required to take into account
all the relevant considerations. The Court isrequired to Keep at the back of
its mind that the object of assessment is to arrive at reasonable and adequate
market value of the lands.
thoughsome guess workis involve, feats of imagination should be eschewedand
mechanical assessment of the evidence should beavoided. Even in the absence oforal
evidence adduced by the land Acquisition officer or the beneficiaries the
judges are to draw from their experience the normal human conduct of the
parties and bona fide and genuinesale transactions are guiding star in
evaluating the evidence. Misplaced sympathiesor undue emphasis solely on the claimants'right
to compensation would place very heavy burden on the public exchequer to which
other everyone contributes by direct or indirect taxes.
fair and reasonable and adequatemarket value is always a question of fact
depends on the evidence adduced, circumstantial evidence, and probabilities
arising in each case. The guiding star or the acid test would be whethera hypotheticalwillingvendor
would offer the lands and a willing purchaser in normal human conduct would be willingto
buyas a prudent man in normal human conduct would be willing to buy as aprudentman
in normal market conditions prevailing in the open market in the locality in
which the acquired lands are situated as on the date of the notification under
Section 4 (1) of the Act; but not an anxiousbuyer dealing at arm's length with
throw away price, nor facade of sale orfictitious sales brought about in quick
succession or otherwiseto inflate the market value.
judge should sit in the arm chair of thesaid willing buyer and seekan answer to
the question whether in the given set of circumstances as aprudentbuyer he
would offer the same market valuewhich the court proposed to fix for the acquired
lands inthe available market conditions. The court is therefore, enjoined with
the bounden duty of public function and judicial dispensation indetermination
of the marketvalueof the acquired land and compulsory acquisition.
best evidence of the value of propertyare thesale transaction inrespectof theacquired
land to which the claimant himself is a party; the time at whichthe property
comes to be sold; nature of theconsideration and the manner in which the
transaction cameto be brought out. They are all relevant factors. In the absenceof
such a saledeed relating to the acquired land, the saletransactions relating to
the neighbouring lands in the vicinity of the acquired land.In that case, the
features required to be presentare ; it mustbe within a reasonable time of the
date of thenotification;it must be a bonafide transaction; itshould be a sale
of land similar to theland acquired or land adjacent to the land acquired; and
it should possesssimilar advantageous features. These are relevant features to be
takeninto consideration to prove the market value of the acquired land as on
the date of the notification publishedunder Section 4(1) of the Act.This would
be established by examining either the vendor or the vendee.If it is proved thatthey
are not available, the scribe of the documentmay also be examined inthat
51-A of the act only dispenses with the production of the original sale deed
and directs to receive certifiedcopy for thereason that parties to the saletransaction
would be reluctant topart with the original sale deed since acquisition proceedingswould
take longtime before award of the compensation attains finality andin the
meanwhile the owner of the sale deedis precluded from usingthe same for other purposesvis-a-vis
thisland. The marking of the certified copyis perse is not admissiblein
evidence unless it is duly proved and the witnesses, viz., the vendor or the
vendee, are examined. Thisprinciple hasbeen repeated in a catena ofsubsequent
decisions ofthis Court.
Kumar & Ors. V/s. Union of India& Ors. [1996 (11) SCC
542], this Court pointed out thatdoctrine of equality in determination of the
payment ofsame compensation to allclaimants covered by thesame notification, is
not a good principle. Treating the entire villageas oneunit and uniformly determiningcompensation
that basis is not sustainable in law. The Court must always determine market
value prevailing as on the date of notification under Section 4 (1) of theAct andnot
what was claimedby theparties. Even estimate of claimant is not decisive. The
status of the claimant is irrelevant. It was reiterated that while determining
the compensation under section23 (1), the Court should sit in the arm chairof a
prudentwilling purchase in the open market and see whether he would be willing
to offer the sameprice as is proposed to be fixed bythe Land Acquisition
Officer asmarket value for the same or similar lands possessedof all the
advantageous features.This test should always be kept in mind in analysing theevidence
and the Court should answer affirmatively taking into consideration all the
relevant factors. If feats of imagination are allowed the sway, the land
Acquisition Officer/collector would overstep judicial decisions/quasi-judicial ordersand
would land in misconduct amenable to disciplinary law. In that case, thecompensation
as fixed by the Land Acquisition officer was reduced. In Special landAcquisition
Officer,Dharwad V/s. Tajar Hanifabi (Smt.)[(1996)10 SCC 627], the question
related to determination of the market value in respect of 6 acres of land.
When theland in factwas used foragricultural purpose, no prudent andwiling
vendee would offer the market value on square foot basis. Thus determination of
compensation on the basis of square foot basis on thefoot of a small saletransaction
washeld tobe a wrong principal of lawand according the determination of
compensation was reducedfrom Rs. 1,96,20\- per acre to 45,000/-per acre.
Produce Market Committee V/s.Land Acquisition officer and Asstt. Commissioner
&Anr. [(1996) 10 SCC 629], same view was reiterated. It was held thatwhen a
total7 acresand oddof landwas sought to be acquired no prudentpurchaser in the
open market would offer to purchase the open land on square foot basis that too
onthe basis of a few small sale transactions. This court pointed outthat such
fixation of the market value wasillegal and accordingly reduced themarket
thus b be settled lawthat the court is enjoined to determine the market value
on an objective assessment of the conditions prevailing in theopen market;
nature of the user of the land to which theland was put on the dateof the notification,the
income derived therefrom and all other relevant attending circumstances.
market value so determinedshould be just,adequate and reasonable. Inother
words, it must be just equivalent to what the land is capable of fetching inthe
open marketfrom a willing and prudent buyer, Therefore, the court is required
to sit in thearm chair of a bona fide willing and prudentpurchaser in the openmarket
and seekan answer to the question whether in the conditions prevailing in the
market he would offerthe same market value as the court has proposed.
has relied upon the oral evidence adducedby theclaimants in support ofthe Claim.
It is not in dispute, aseven pointed out by the Land Acquisition Officer, that
there is colony and railway shed etc. near the acquired lands. But the question
is: whether on the date of the notification, the lands possessed of potential
value and were fit foruse asbuilding site?On thebasis of the evidence adduced beforethe
land Acquisition officer and the contents of theaward which is always part of
the record and material evidence, it is difficult to accept the contention of ShriSudhir
Chandra that thelands possessedof potential value for being used for building
purpose. Except a small fraction of land, the elands are agricultural lands. Tomake
them fit for construction, evenaccording to the conservative estimate,an amount
of Rs. 23.50 per acre to level up the same. Itwould be figment of imagination
to believethat aprudent builder woulddo that. TheHigh Court, therefore, is clearly in error in treating the lands as fitfor
building purpose and on that basis determining the compensation after giving
question, therefore, arises:what is the market value the lands were capable to fetch?In
a reference under Section18, asheld earlier, the burden of proof always is on theclaimants
to establishthat the lands are possessed of advantageous features and are,
therefore, capable of fetching higher marketvalue than whatis determined by the
Land Acquisition Officer in his awardunder Section 11. In view ofthe fact that
the High Court itself hasrejected all the sale deedsexcept Ex. A-12which we are
now constrained to reject, andas no other evidence isavailable, we cannot allow
the appeals anddismissthe reference. The Court, insteadof indulging into feats
of imagination, should sit in thearm chair of a prudent willing purchaser in
the normal conditions of the market and seek answer to the question whether he
would be willingto offer the amount proposed by the court, after taking into
consideration all the features of the land existing ason thedate of the
notification . In view of the material collected by theland Acquisition officer
himself as referred in the award, we think that after taking into consideration
allthe relevant factors, the reasonable compensation should beRs. 50.000/- per
acre. The compensation is accordingly awarded.
question thenis: whether the claimants arealso entitled to additionalamountunder
Section 23(1-A)? The notification under Section 4(1) of the Act was issued on December 9, 1980. The possession was taken on June 20,1981.
Amendment Act 68 of 1984 was introduced onthe floor of the House onApril 30,
1982. Thus it is clearthat possession wastaken prior to the introductionof
Amendment Act. However, award under Section 11 was made onJune 19,1982, i.e.,
after the introduction of the bill but before the Actcame into force. It would
be beneficial to refer to the transitional provisions contained in Section
30(1) (a) of the Amendment Act which reads as under:
Transitional Provisions. - (1) The provisions of sub-section (1-A) ofSection 23
ofthe principal Act, as inserted by clause (a) of Section 15 of this Act, shall
apply, and shall be deemed to have applied, also to,and inrelation to,- (a)
every proceeding for the acquisition of any land under the principal Act
pending on the 30th day of April, 1982 (the date of introduction of the Land
Acquisition (Amendment) Bill, 1982, in the Houseof the People, in whichno award
has been made by the Collector before that date;" InK.S. Paripoornan V/s.
state of Kerala &Ors. [(1994) 5 SCC 593] the Constitution Bench considered
the effect of the transitional provisions in section 30 (1) (a). The right to
additional amount 12 per cent per annumon enhanced compensation was heldto bepart
of the component of determination of compensation. If the proceedingswere pendingas
on the date the notification underSection4(1) came into force, the provisions
of the Amendment Act 68 of 1984 would apply. By operation of the transitional
provision in Sections 30(1) (a), the claimant isentitled to additional amount
@12 per cent per annum to be paid from the date ofthe notification under
Section 4(1) till the date of depositinto court and where the possessionwas
already taken, from the date of the notification till taking of possession.
Similar view was reiteratedin special Tahsildar (LA) P.W.D. Schemes, Vijaywada
V/s. M.A. Jabbar [(1995) 2 SCC 142] and Khanna Improvement Trust V/s. Land
Acquisition Tribunal & Ors. [(1995) 2 SCC 142]. Accordingly, the
respondent-claimants are entitled to payment of additional amount@12 per centper
annum from the date of the notification till date of the taking possessionas
ofadditional amount underSection23(1-A)is a substantive right. Under those circumstances,by
operation of thetransitional provisions in Section 30(1)(a), the claimants are entitledto
theadditional amount at 12% per annum under Section 23 (1-A) from thedate ofnotification
under Section 4(1) till that date of taking possession.
Rs.1,00,000/- peracre, they are entitled to compensation atthe rate of
Rs.50,000/- per acre in respect of allacquired landswith solatium at 30% onthe
enhanced compensation and interest @ 9% for one year from June 20, 1981 and on
expiry thereof, @ 15% tilldate ofdepositinto the court; andadditional amount.
Consequently, the award and decree ofthe referenceCourt stand modified. The
judgment of theHigh court Stands set aside.
appeals are accordingly allowed. As a result, the cross appeals of the
respondent-claimants stand dismissed.